Coleman v. Ladd Ford Co.

BURKE, P. J.

In the interest of securing uniformity of decision and settling important questions of law the instant case was certified by the Appellate Department of the Superior Court for the County of Los Angeles, on its own motion, after decision, to this court. We ordered it transferred for hearing and further decision. (Cal. Rules of Court, rules 62 and 63.)

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The ease arises out of the fraud of defendant in inducing plaintiff to purchase a new automobile upon representations that defendant would dispose of another automobile owned by plaintiff. Damages were awarded on the basis of the “loss of bargain” rule involved in fraud sale cases, interpreted by

Ward

v. Taggart, 51 Cal.2d 736 [336 P.2d 534], instead of the “out-of-pocket” rule declared in

Bagdasarian

v.

[92]

Gragnon,

31 Cal.2d 744 [192 P.2d 935]. The decision of the appellate department of the superior court follows the reasoning of the

Ward

decision, and we transferred the case in order that it may be determined whether it qualifies as an exception to the

Bagdasarian

rule in order to avoid injustice in the particular case, or whether such “out-of-pocket” rule must be considered controlling as the uniform rule for all fraud sale eases.

At the time of plaintiff’s purchase, she owned a used automobile on the purchase contract of which there remained a balance payable. Defendant’s salesman represented to plaintiff that he had a buyer for her used car; that the balance due the finance company on the ear would be paid off and she would have no further payments to make. Relying on these representations, plaintiff purchased the new ear from defendant. The representations as to the old car were false and fraudulently made and the payments were never made. Later the finance company repossessed the used car, sold it, and the assignee of its claim obtained judgment against plaintiff for the balance of the purchase price and attorney’s fee. Plaintiff did not elect to rescind her contract for the purchase of the new car, but brought suit for damages for fraud.